ONE general price hike which Brazil has been going through, especially in terms of food, is reaching products that were already consumers’ alternative in times of strong inflation.
One of these items is pepperoni sausage. Protein, one of the components of several snacks with more affordable value, has doubled in price in the last 15 days, according to the president of the Brazilian Association of Bars and Restaurants (Abrasel) in Ceará, Taiene Righetto.
He details that the meat in general they continue to rise a lot, but the highlight of the last few days is the pepperoni. Surprised by the strong rise, the industry representative reveals that some establishments are already removing the dishes that require the item from the menu.
“It’s an input that we didn’t even pay much attention to, precisely because it’s cheaper. But after the fuel readjustment, everyone has been complaining,” he says.
According to official inflation monitored by the Brazilian Institute of Geography and Statistics (IBGE), sausages were 10.86% more expensive in Fortaleza in the last 12 months. The result considers all types of sausage.
In addition to removing the menu, Righetto points out that the houses are also looking for alternatives to replace products, when possible.
A minority portion of the segment has already readjusted the prices charged to customers, while the others continue to seek ways out to avoid impacting customers and run the risk of harming sales.
The orientation to innovate in the dishes and look for substitutes in the menu is expressed by the Union of Bars, Restaurants, Buffets and Similar Services of the State of Ceará (Sindirest-CE).
The president of the entity, Dorivam Rocha, emphasizes that the current scenario is another challenge to be faced by the sector, which is still seeking to rebalance after the severe impacts of the pandemic.
“Inputs are skyrocketing in price, some suppliers are already struggling to supply, such as some cuts of protein and dairy from specific brands,” he says.
He explains that this shortage is linked to the lack of fertilizers in the country, a product mostly imported from Russia and which was already experiencing supply instability even before the beginning of the conflict.
Used in agribusiness and livestock, the difficulty ends up indirectly reflecting on the products in the chain.
“We guide entrepreneurs to intensify inventory control to minimize losses and conduct market research with suppliers. It is a difficult and delicate moment, and we do not have good expectations of reducing these costs”.
Another point of attention, according to Rocha, is carrying out a strict financial analysis of the costs and expenses of the establishment, to assess the financial health of the place and define the best time to implement adjustments to the menu, if applicable.
The president of Abrasel also indicates that another product that has generated concern is wheat flour, an input widely used by pizzerias.
In this case, the increase has also reached end consumers. The president of the Ceará Supermarkets Association (Acesu), Nidovando Pinheiro, the product underwent readjustments soon after the beginning of the confrontation between Russia and Ukraine.
He estimates that values have risen by about 20%. The increase has also triggered increases in the line of products derived from wheat in general.
“Some mills even suspended sales to us. Then they opened again, but with this readjustment of almost 20%”, points out Pinheiro.
Another product that makes up happy hour and can get even more expensive is beer. Russia and Ukraine, countries involved in the ongoing war, are major producers and exporters of malt and barley, the beverage’s raw materials.
In October 2021, Ambev had already readjusted the price of 32 beer brands produced by it by up to 8%. In February this year, it was Heineken’s turn to increase by about 10% the value of the 12 labels it signs.
Recent corrections are still holding values at current levels, according to Righetto. But the concern is that, with the extension of the conflict, new transfers are inevitable.
The superintendent of the National Union of the Beer Industry (Sindicerv), Luiz Nicolaewsky, points out that Russia and Ukraine account for 28% of global barley exports and that Russia is the third largest supplier of malt to Brazil.
Although the country is mainly supplied by Uruguay and Argentina, he points out that the global rise in prices caused by the reduction in the world supply of cereals in the midst of the war tends to affect all buyers.
“In addition to the increase in commodity prices, the industry has also been impacted by high interest rates and inflation, and production costs added to fuel, oil and electricity readjustments, which affects the entire Brazilian industrial sector”, he explains.
In terms of supply, he guarantees that the war should not cause a shortage of inputs, but due to the shortage in the international market, an increase of 10% in the value of these inputs is already perceived.
Regarding likely new readjustments in the brewing industry, Nicolaewsky points out that this possibility will still depend on the unfolding of the conflict in Europe.
“The rise in prices reflected the increase in production chain costs, mainly electricity, fuel and commodities. We will have impacts with the war, but everything will depend on the unfolding of the conflict between Russia and Ukraine”.